Apple is planning to remove its controversial App Store policy of taking a 30 percent cut on tipping from users to content creators in China, local media The Paper is reporting (in Chinese), citing several sources they identified as execs at Chinese internet firms. Several game developers also got wind of Apple’s plan to change its tipping policies, the report noted.
By classifying tipping or donation as a form of in-app purchase, the US company demanded app makers earlier this year to disable the tipping function per its new App Store rules, allowing Apple to take a 30% cut.
The Paper made public an unconfirmed new App Store policy that people who want to make donations to others without making in-app purchase should meet the following requirements: a) the donation decision is made by the donor; b) the donor will be charged 100% for tipping; c) the tipping is not exchange for any digital content or services. Under the new policy, the tipping will be treated as a means of personal donation.
Since the boom of live streaming, virtual gifting has become a popular form through which users interact and show their gratitude to performers writers, developers and other content providers who give out stuff for free.
Apple’s move of taking a sizable portion of the donations has upset the country, where industry insiders called it an “Apple Tax”. For many, turning a means of expressing personal appreciation into a revenue source is not only unjustified but also reflects the company’s failure to fully understand the Chinese market.
To some extent, this is understandable given that there’s no tipping service in American live streaming apps like Facebook Live and Periscope. Facebook, however, does allow broadcasters to show ads in their streams and to keep 55 percent of the revenue.
After slowing market growth over the past few months, Apple has made several major moves to reinvigorate its Chinese business, including the largest promotion campaign for Apple Pay China-wide yesterday, it named a new China head today.
We have reached out to Apple for comment and will update when we get a response.